So the time has finally come for my father to retire. I hope to share this story to give an example as to why your (or your parents') retirement planning should focus on investments rather than alternatives. My father has been successful in his career by just about any reasonable definition. Unfortunately this sort of permeated into all other aspects of life and he's basically acted as if he's always known more than anyone else, regardless of the subject. He has always had a hunch that the market is going to collapse in a way that will somehow be unrecoverable so has never felt comfortable putting anything in stocks. When his parents died he bought gold bars with the inheritance and threw them in a safe deposit box. Over a 40 year career everything has been in gold, silver, and CDs.
With retirement looming I convinced him to meet with a financial planner to determine what his annual spending should be and to finally diversify his portfolio. He was rather shocked to hear how much of a change in his lifestyle he is soon going to have to make considering how well he had done with his career. That is when I reviewed that the vehicles he had invested in at best only kept up with inflation, whereas if he had invested those same sums he would be looking at a retirement account that was TEN TO TWENTY TIMES LARGER than his current savings. I did not have the heart to tell him this as it's obviously too late to change.
TLDR: Compound interest is the real deal. Invest early, apply windfalls like inheritances that don't have to go to debt into diversified funds, and enjoy a happy retirement.
Submitted October 05, 2017 at 11:57AM by Gorfang http://ift.tt/2yrn5Wf
